By Brandon Matthews
In recent weeks, SIRI shares have skyrocketed from a low of .61 to a high of .95 following its pre-released fourth quarter results. The initial results confirmed Sirius XM’s return to subscriber growth and ability to generate substantial free cash flow. The company maintained its 2009 operating guidance, while reporting that it had added over 257,000 subscribers in the quarter and had achieved free cash flow of over $100 million. The better than expected results got the attention of Wall Street, as analysts took note and began to initiate coverage or upgrade the equity while raising price targets. Credit upgrades by Bank of America/Merril Lynch (NYSE: BAC), Standard & Poors and Moody’s soon followed.
Sirius XM shares have since pulled back to the mid .80’s following some extremely suspicious trading out of the Boston Stock Exchange. Some speculated that a conspiracy existed to hold SIRI shares below the one dollar mark, in order to force Sirius into enacting its shareholder approved reverse split. A Satwaves exclusive report on newly approved Nasdaq compliance guidlines however, makes that theory highly unlikely. As we have been reporting for months, the market has confirmed that a potential reverse split of Sirius XM shares is, and always was, a non-issue.
The activity is more likely tied to the options market. As Siri shares near the coveted dollar mark, many writers of call options, both naked and covered, have a vested interest in keeping SIRI shares “out of the money.” This applies to both institutional and retail call option writers who now run a substantial risk of losing their Sirius positions. Sirius XM will be reporting their Q4 2009 earnings after February expiration, and with so much good news already reported, it is not surprising to see Sirius shares retreat to a more comfortable level for writers of these one dollar call options.
Howard Stern is even being used to help suppress the price of SIRI as options expiration draws near, as the media is being manipulated into false reporting of his on air comments. These comments suggest he will not only leave Sirius XM to take over American Idol, but some go so far as to claim he has confirmed this. A recap of yesterday’s show on MarksFriggin.com, reveals that Stern never confirmed or denied anything, but only mocked the judges, contestants and what he deemed a karaoke show.
This is a double edged sword that could create a substantial short squeeze if Stern was to dismiss the rumor outright, as he did recently with rumors of his return to advertising based, terrestrial radio. If this is combined with unexpected good news or a potential run up into earnings, shares of SIRI could be catapulted well above the 1.00 mark. I am looking for a recent rise in Sirius XM short interest to confirm this later today.
Position: Long SIRI
you have been saying this for a while….the powers that be will never let this thing get to a buck
BM, “As we have been reporting for months, the market has confirmed that a potential reverse split of Sirius XM shares is, and always was, a non-issue.”
I tend to think this was a HUGE issue, one that I belive you said you would sell your shares if they don’t do a R/S, correct me if I’m wrong but this issue was a big one of my concerns with this stock and to call it a non issue is just stupid. I’m sure you will have a counter punch to this but come on man, the R/S was a giant elephant in the room and was defintly more than a non issue. I appreciate your reporting but sometimes your articles don’t always add up. Where’s the Duke when you need him?
…and yet as you can see, despite a reverse split being very unlikely in the week of the SEC decision, the stock has not moved up.
Clearly, you were wrong. I know its tough to admit to being wrong, but the fact remains. The market has spoken, and as we have told you for months, no one cares…
…and yet as you can see, despite a reverse split being very unlikely in the wake of the SEC decision, the stock has not moved up.
Clearly, you were wrong. I know its tough to admit to being wrong, but the fact remains. The market has spoken, and as we have told you for months, no one cares…
Brandon, “in the wake” of what, your wide spread, global reporting that hit the shelves of every major news stand in print and online the minute it became news to YOU, two weeks after it happened? I don’t think so.
You are very quick to make generalizations. This news was so BIG that in late January when the rules changed, no one heard about it; Nasdaq didn’t even put out a press release. Sirius surely hasn’t put out a release.
Contrastingly, this is quite possibly what the stock is up on since then, not what we all ASSUME it’s been up on: upgrades on debt from JUNK status to lesser junk status, upgrades to ONLY a dollar from lesser brokerage houses like Wunderlich WHAT and WHO was that other one, etc. The fact is that no one knows why we’re up or not up more.
On top of that, despite YOU reporting that this extension issue had something to do with Sirius in several ways, it really didn’t. At best, it implies that there MAY not be a R/S, but I’d bet the big boys are waiting on what we should be waiting on, official word from the company, because the company still has an approved R/S up its sleeve.
Basically, no one has a clue what is going on except that things are basically positive. To make the generalizations you are prone to wildly make as some sort of justification of your previous, yet now defunct theories, is just bad reporting. To suggest that your article on the extension got the word out to the world and now stock fluctuations have proven your old theories about an R/S meaning nothing is a go-go gadget reach; all I can say is that your articles may at most have a readership of 20,000, and just as a reminder, there are nearly 7 billion people on earth.
I’m not trying to bust on you, anyone would love to have that many readers, but most would appreciate it, not pretend that their articles move the markets. Embrace your readership, but your sudden Fox Newsish reporting filled with inferences is going to lose you all of your intelligent readers. Please go back to sticking to the facts like you did before the R/S disease began to warp your mind. I count on this site for unbiased, real news about a stock in a timely manner, not these argument articles you post once a week now.
BM, I was clearly wrong? I believe in previous posts I stated my OPINION of a Dec 2010 price target of $1.5 to $2 being an easier to obtain feat compared to reaching over $20 with a R/S. I love you man but you really need to get back to reporting the facts and staying on the sidelines. Your ideas and suggestions and theories are not definite truth. Therefore, you should relax a tad when others differ from your views. All I need is a steady .10 per month increase in share price and my theory is correct. If I’m wrong I’ll gladly admit it, will you??
come on now… the reverse split is a big issue. they’re never welcome, stocks mostly go down after one. sirius isn’t one of wall street’s favorite stocks, it’s not a google or apple… sentiment may be changing, but still. to expect a neutral/positive reaction from one of wall streets most hated stocks is just wishful thinking.
to say that it was always a non issue is just silly. you said it might go up on the news of a reverse split (lol), let’s be serious what are the odds of that!??
it’s nice to view the cup half full, but if management thought the reverse split was good they would have done it a long time ago.
Good article Brandon. Regarding HS, I learned today from the HSaftershow, Coca-Cola has never been a sponsor of the HS show and Howard bashes the company for putting out a product that harms people. I believe CC is a major Idol sponsor and would probably quit being involved with the show if HS became a judge.
Don’t forget about the daily volume. Remember the 100M volume days before during the run from $2.50 to $9.43. I think we run more. Highly suspicious. Ever since we hit .95 BOSX and NASQ have been manipulating the shares using 500k blocks either walking it up or down. Looks like accumulation. Something is happening for certain…
I believe that all these jabs one way or the other are irrelevant. Neither we nor definitetely BM can move the stock either way. The only thing that can move the stock is siri performance. And it is moving it. If the company des well in such depressing times, it will do phenomenally well when economy is more stable. The company has withstood the test of depressing economy, bashing, smearing, rumors, conspiracy, what not. Now it is a matter of strong management, innovation, continued synergies, and so on and so forth. And this is aslo a matter of TIME. The rest is not relevant. We will definitely see the stock above $2 this year. 2011 will be phenomenal because the momentum is there and a lot of other things will factor in.
I’m looking forward to a fantastic quarterly earnings report. Great 4th Qtr numbers and a good news forecast for 2010 is all that’s needed to propel this stock. I feel like is 95% of the noise is behind us, and we are on the brink of breaking through. Almost there.
The wording is perfect. DO NOT PAY ATTENTION TO NOISE. They want you to focus on the noise rather than on substance. They want to manipulate you to their advantage. All we can do is to remain true messengers of siri. If we truly believe in this company, all we can do is stay the course. It is like climbing the mountain. If you do not believe in it, you had better get off before even strating the climb. Siri is undoubtebtly past the curve, and only positive things can happen if they continue maintaining focus and taking advantage of their unique position. I have full confidence in MK who has so far has done what he promised.
Brandon,
Jan 25th I posted on the yahoo siri board that I wished Mel would prove you wrong about the need to do a reverse by pointing out that Mel stated he would only do a reverse split as a last resort.
Your responds was,”and guess what? times up…it’s last resort time.”
So how can you now say that for that “for 4 months you’ve been reporting that a reverse split is a non issue?”
Boy is this guy full of gas. He has been saying for the last 3 weeks a R/S is inevitable. Now he claims just the opposite. This guys full of BS. He fiip flop more than Obama.
scken7:
Well, BM is not your president. Don’t like it, don’t come here.
BM, thanks for the overtime. This has been a fun ride, and will continue to be. Let’s make some money no matter how.
Since January 1 the market has run Sirius up pretty hard to current levels. I believe the market knew way before Brandon published the ruling that Sirius wasn’t going to reverse split. There has never been a stock that has run up hard prior to a reverse split. So the market was telling us.
Now we follow EBITDA numbers, car sales, and the Stern story. My hope is after all the negotiations are done, that Howard ends up on the Sirius app so Sirius then kick the living daylights out of Pandora on cellphone apps.
The market loves Sirius. What a difference a year makes. Way to go Mel!
Experts warn not to trade based on chats–so I don’t, but I do on price patterns and company fundamentals, both of which are improving, even if not fast enough for some. I also pay attention to the actions of companies such as Ford, which demonstrates strong confidence in Sirius XM, and which has had a PHENOMINAL year so far and has given ample space to Sirius in its latest four-color, slick marketing mailer covering Ford’s attractive 2011 lineup of cars and trucks. The referenced item in the Ford mailer made a great point about paying $12.95 a month for a Sirius Everything package; it works out to about 42 cents a day or less than people pay for a cup of coffee. Genius!!! There will be subscriber conversions to come from the perspective, to be sure. The marketing item also pointed out that subscribers can get a package that excludes Howard Stern in favor of more “family oriented” programming. More Genius, a choice differentiator. Hats off to Sirius XM’s officials that are FINALLY putting the company’s marketing muscle to work in partnership with affiliated companies. I remain long SIRI, anticipating break even and gain coming for holding far longer than I like to hold a position. SIRI’s languishing in dire straights appears to be passing. Unknown risks notwithstanding, I wouldn’t short the stock now if I could do it with other people’s money….